Executives often complain that they can’t get information when they need it. Their information systems may store huge volumes of data, but merely having access to data isn’t enough. Information is data in a meaningful context, and executives and others need it to make decisions that benefit their businesses. Making that context available immediately and reliably is the challenge of information management.
Information management is the acquisition, dissemination, and use of information to create and enhance business value. It involves systems that provide access to information that is relevant, timely, accurate, and secure; its aim is to improve organizational performance. These definitions make it evident that information management includes a wide-ranging series of tasks—tasks that IT professionals have had difficulty in completing.
In practice, these specialists face a seemingly endless array of technologies they must keep running. Old and new, developed in-house or purchased from many vendors, these systems often are incompatible with each other and store and handle data (without the context that makes it actionable) in idiosyncratic ways. The upshot is that IT personnel end up managing data technology, not information. Not only is maintenance of these disparate systems a challenge for them; kept busy doing that, they frequently lack the time and energy needed to understand completely the operations of the business they support and its needs for information.
The development of information management is an emerging phase in the evolution of information systems used for business purposes. Most corporate information architectures have been and remain transactional in nature; they record the processes and results that occur when companies interact with customers, partners, suppliers, and other entities. But today these companies face pressures from global competition, from customers able to find and buy from new sources, and from regulatory bodies. They need to know how to position themselves proactively to design and deliver products and services customers really want at prices they will accept.
Ventana Research has long recognized the critical role that information management plays in answering business’s demand for complete, timely information, but we’ve been concerned that organizations themselves do not understand it well. We recently completed a research study on precisely this issue, evaluating business users’ needs and IT departments’ concerns and the state of information management technology. A total of 747 respondents qualified for and completed our research survey. Most are located in the United States; they represent all major industry groups and all company sizes, ranging from less than $100 million in annual revenue to more than $10 billion.
The survey revealed that many organizations do not fully grasp why information management is important or how it works. It is particularly telling that when we rated the maturity in this area of those 747 companies, we found that about one-third of them have reached only the second of four levels of maturity. An additional one-fourth of organizations are one step higher, at the third level. Only 10 percent have reached the most mature level of information management, at which they can apply it effectively to realize competitive advantage.
The Data Deluge
The nearly two-thirds of organizations that we place in the earlier stages of maturity still focus on the fundamental technologies that support information management. Respondents to our survey named business intelligence (BI), data warehousing, and data quality as the most important components of information management. Those are also the areas in which most information management initiatives are under way or planned for the near future: BI was the information management initiative cited most frequently (by 52 percent of respondents), followed by data warehousing and data quality (both by 48 percent).
In most companies, information technology developed piecemeal, often in isolated systems owned by departments, geographically dispersed units, or what were then separate companies. Now, to build complete pictures of business relationships, managers and decision-makers need to gather and work with information that is stored in these various systems in mutually incompatible formats. To put it simply, they need information from more systems than in the past, they need it faster, and they need to be able to integrate, analyze, and distribute it.
Add to this messy situation the fact that enterprises are flooded with more data than ever before. More than half (56 percent) of respondents to our survey said growth of their organization’s structured data—traditional IT data structured into categories such as the fields and records found in relational databases—was at least 20 percent per year, and half of those (28 percent) said their structured data grew by 30 percent or more.
At the same time, companies must contend with new types of data as well. Much data today is in the form of text documents, e-mail messages, spreadsheets, graphics files, or even voice recordings in call centers, none of which is readily stored and indexed in a database. This unstructured data often is referred to simply as “content,” and a variety of software dedicated to content management has emerged to deal with it.
Within organizations, content is growing faster than structured data. The largest portion of survey respondents (25 percent) said unstructured data at their companies was growing by more than 40 percent annually. In total, 65 percent said it was increasing by at least one-fifth each year. This growth pattern was stable across all sizes of companies and nearly all industries in the study. These results reflect the growing presence and importance in businesses of all sorts of Internet-based and desktop-based systems that generate unstructured data.
Users of business intelligence and other analytic tools may need information from any of these systems. The task for the IT group is to build an enterprise information architecture that provides direct access to data across different databases and repositories, and defines types of information consistently so anyone can use and share it. Their focus must shift from systems and applications to the information they contain, from the creation of data to the consumption of information.
Integration the Main Challenge
Our research found that integrating information from the various systems that hold it is the most difficult impediment organizations must overcome to achieve consistency and broad, easy access. Addressing this is a matter of both technology and organization.
Technologically, almost one-third of respondents said that the use of incompatible tools by was the main source of information inconsistency. Tools may define, format, and manipulate data in ways particular to themselves, and people using other tools may misinterpret or be unable to use it. That result reflects the reality that various desktop analysis tools are widely used within business units that operate separately from IT departments, which generally manage centralized data repositories and enterprise retrieval and analysis tools. Executives and senior management especially pointed out the problem of incompatible tools. Similarly, 45 percent of participants said that the worst vendor shortcoming in this regard is that products consist of too many parts and lack sufficient integration. Ventana Research recommends that organizations challenge technology vendors to build or acquire technologies that answer their demand for integrated tools.
When it comes to organizational difficulties, we found, for example, that although nearly two-thirds of respondents reported that they use the same group (typically IT) to manage structured and unstructured data, integration of these types of data for business purposes is much less common.
Being able to mix structured and unstructured data often gives decision-makers better ways to communicate results and to link planning systems with measurement systems. For example, inserting financial results housed in structured databases into presentations or memos communicates more complete information; likewise, transferring planning model results from spreadsheets into measurement systems that use structured data creates better performance measures. Systems that automate this mixing can enhance business productivity.
However, most respondents reported that they do not commingle structured and unstructured data in the software applications they use to do their jobs. People in financial functions most often do so, but even here only about one-third of respondents combine such data. These are low levels of integration of data, and they indicate an absence of technologies and processes that could make both types of data available to the business as and where it is needed.
Technology Planning
To achieve this integration, organizations need strategies to support not only existing information architectures but also the improved ones envisioned for the future. Our study suggests that companies are devising the former and becoming aware of the latter.
As noted earlier, the most common information management initiatives either under way or planned for deployment involve data warehousing (currently under way in 37 percent of respondents’ organizations), business intelligence (36 percent), and data quality (34 percent). The first two are well-established technologies; their frequent mention suggests that many organizations see information management as having to do with structured data. That a large number of respondents cited data quality suggests that there is a widely held perception that data may be inaccurate and requires quality control.
As for which types of information management initiatives they plan to deploy into production within the next 12 months, survey participants told us they expect to continue the efforts identified in the top choices above. More specifically, BI projects are planned in 16 percent of the responding organizations, tied for the second-highest total. Only 11 percent said that a data warehouse project will get under way in the next year, but we attribute the decline to the fact that many projects already have been started or completed. Data quality and data integration were each cited as a planned project by 14 percent of respondents.
The plans for new initiatives were revealing. Ranking highest, at 17 percent, was data governance, which is more an organizational undertaking than a technological one. (We discuss this below.) Tied for second (at 16 percent) with BI was enterprise master data management (MDM); currently only 14 percent of respondents’ organizations have an MDM project going. Thus, at least some organizations are recognizing the importance of having high-quality, consistent definitions of master data.
Also cited among the most-often-planned initiatives for the next 12 months were building repositories for enterprise metadata (15 percent), which is related to MDM, and for content management (14 percent). Regarding the latter, half of the respondents said their organizations do not have such a repository; the explosive growth in unstructured data likely is driving the interest in acquiring one.
There are some more advanced technologies associated with information management, and deployment of them is probably farther off. For example, more than half of respondents (52 percent) have not undertaken enterprise information integration (EII), which seeks to establish uniform methods for data access and how information is represented. Adoption of EII is one of the indicators we use to gauge technological maturity. Of the one-third that have adopted it, 58 percent are large organizations as measured by annual revenue, which supports our conclusion that large companies are more likely to undertake this advanced step in information management.
Another area worthy of mention is enterprise search. Although IT respondents do not view enterprise search as a key part of an information management strategy, business executives do. Fourteen percent of organizations currently provide enterprise search, and another 13 percent plan to deploy it in the next 12 months.
All of these areas have in common the drive to gain control over enterprise data, integrate it, enforce consistency, and provide it in context as information for making business decisions. But the universe of information management-related technologies addresses a far broader range of functionalities and tools than these, and it is growing rapidly. In general, we see these technologies falling into the following categories: application or event integration, content and data integration, content management, customer data integration (CDI), data association and mapping, data management, data mining, information appliances, master data management, product information management (PIM), and information search and access.
Stewardship, Governance and Security
Being able to see where data assets are housed and how they are utilized is a critical first step in reducing the risk and costs of future problems and potential litigation. When management lacks this visibility, corporate data about customers, products, suppliers, and even finance may be exported, manipulated, or even stolen and sold by employees or outsourcing providers. Data governance thus is a critical indicator of organizations’ ability to manage data as it is affected by people and processes.
As noted above, respondents identified data governance as the most important project upcoming in the next 12 months. Yet only 36 percent of organizations surveyed publish a formal data governance policy (the figure rises to 47 percent at large companies). Ventana Research views publishing data governance policies as an indicator of high maturity.
A related finding is that responding companies consistently entrust data stewardship (that is, managing the integrity of enterprise data) to their IT departments. More than half of respondents indicated that their IT organizations have that responsibility, while slightly less than one-third said that business units have it. We urge management to ensure that business units participate actively with IT in the stewardship of enterprise data. This collaboration is critical for effective data governance and for corporate governance in general, since IT in isolation cannot know how to prioritize data governance issues to maximize organizational revenue generation, cost containment, and competitive effectiveness. Examine your current data governance practices and then devise processes and name a committee that can govern your data securely across the enterprise.
A particularly critical data governance issue is information security. Employees, contractors, and outsourcing providers are risk points for organizations. One-third of respondents said they have an information security project under way, which was the fourth-highest ranking for current projects, and 10 percent said they plan one in the next 12 months. Others would do well to look into this area. We believe enacting explicit information security policies and deploying technology to implement them are critical components of sound information management.
Business Involvement with IT
As is the case with respect to data governance, Ventana Research urges business units, managers, and executives to get involved and stay involved in initiatives in other areas of information management as well, rather than leaving it all to the IT group. In most instances, business users are the ones who need the information to do their jobs well, and they will bear the brunt of complaints from customers, executive management, shareholders, and regulators if they make bad decisions based on that information.
Wise companies realize this, but some industries are better at it than others. For example, 60 percent of respondents in aerospace and defense organizations said their organization’s business units have responsibility for data integrity, as did 57 percent in pharmaceutical companies. Industries such as these, where the costs of bad data are high, are more likely to empower business units to do that job because those business units have more at stake. In our view, more-mature organizations follow this path.
They also ground their information management strategies in solid business reasoning. When asked to name the three most important business drivers that motivate information management projects in their organizations, 47 percent of our survey respondents who cited reducing IT costs as a motivating factor ranked it the most important. This result held even for respondents whose job function involves IT, and we interpret it as reflecting a general perception that IT costs more than it should. It also suggests that many people view information management as mainly a technology issue.
However, CEOs, general managers, and others whose job function includes management ranked making better-quality decisions as the most important factor. And closely following the quality of decisions was the ability to make decisions faster. The citation of these business criteria, as well as others cited less often, indicates a growing understanding that information management can make a difference in an organization’s core performance.
Information management requires continuous thought, planning, and investment. Business users will not cease to demand wider and quicker access to information, and there will be more information of more types all the time. Only through a rigorous, top-down commitment can companies take full advantage of the information that helps set them apart from the competition.
Mark Smith is CEO and EVP of Research at Ventana Research.
